Local Government Debt Problems And Governance Research

On January 23,2019,the Ministry of Finance announced the "2018 Local Government Bond Issuance and Debt Balance",indicating that the national local government debt balance reached a record high of 18.38 trillion yuan,compared with10.89 announced by the National Audit Office at the end of June 2013.The trillion yuan increased by 68.7%.The above data does not include the debt that the local government has the guarantee responsibility and the debt that may bear certain responsibility for assistance.In late August 2018,the National Audit Office had fully carried out the audit of the implicit debt of local governments.If the above-mentioned forms of debt are considered in a comprehensive manner,the actual scale of local government debt in China cannot be underestimated.Since 2018,China's local governments and financing platform bonds have defaulted on payment defaults,and financial institutions' borrowings have not been able to repay principal and interest on schedule.Under the background of the domestic economic downturn and foreign trade frictions becoming more and more normal,local government debt risks have become increasingly prominent.In the three major battles,properly managing local government debt is an important starting point for achieving "six stability." As an integral part of the country,once the debt problem cannot be properly managed,the stability,unity and harmonious development of the local people will be directly affected,and bring a series of negative effects to the region,even the country.We are eager to realize that there are risks in the current local government debt,and the local government debt governance has entered the deep-water area.It is urgent to analyze the causes and find the right governance implementation.Only with a sober understanding,can local governments keep food in their hands and keep a balance in the Impossible Triangle of infrastructure investment,dealing with stock debt and preventing debt crisis.This article is mainly to analyze the current situation of the local government debt take Shunde District of Foshan City,Guangdong Province as an example,and find out the problems.Through the quantitative analysis of the financial data and the reasons for the formation of the problem,we can further analyze and make suggestions for the local government debt problems in China.The article is divided into five parts to analyze the local government debt problems and governance.The first part sorts out the research literature on local government debt governance at home and abroad.The second partdescribes the definition and classification of local government debt.The third part analyzes the development history,scale and existing problems of the financing platform of China's local government debt,and points out the potential risks of debt and the transmission path to the economy and society.Based on the above analysis,The fourth part takes Shunde District local government as an example,analyzes the financial situation of Shunde District,evaluates the risk and potential problems of local government debt,and lists the measures of Shunde District local government debt management.Through analysis,it is concluded that the overall debt level in Shunde District is reasonable,but the stability of fiscal revenue is low,and the dependence on land transfer fees is relatively high.Under the new economic normal,there is a possibility that the debt index will rise sharply,still need to adhere to the industry-oriented development path.The fifth part,combined with the experience of local government debt governance in the world,provides reliable and effective measures and suggestions for local government debt governance in China.